KEFI Gold and Copper has moved the Tulu Kapi gold project in Ethiopia into a more advanced stage of execution after completing key financing arrangements, signing a major mining services contract and increasing activity on site.
The company has replaced a three-year US$15 million working capital facility with US$10 million of additional royalty financing and US$5 million of additional Ethiopian preference shares. The total funding available to the project is unchanged, but the revised structure replaces short-term working capital with longer-term capital at subsidiary level.
This gives KEFI greater financial flexibility as Tulu Kapi moves towards senior debt drawdown and full construction. The company and its funding partners have now raised or committed US$355 million towards the project, compared with an initial capital requirement of around US$355.6 million. That figure includes a US$15 million cost overrun reserve.
With the funding package effectively assembled, the main focus is shifting from financing to delivery. The next stage depends on satisfying the remaining procedures required before senior debt can be drawn and ensuring contractors, equipment and infrastructure are ready in line with the project schedule.
KEFI has also secured regulatory clarification in Ethiopia regarding project gearing. Historical exploration expenditure can be treated as equity for the relevant calculation, removing another issue that had to be addressed before the financing structure could move forward.
Operational activity is increasing at the same time. KEFI has signed a US$400 million mining contract with BCM covering services over the initial nine-year mine life at Tulu Kapi. BCM is mobilising in Ethiopia and can proceed with ordering and deploying the Caterpillar mining fleet required for operations.
KEFI Gold and Copper plc (LON:KEFI) is an exploration and development company focused on gold and copper deposits in the highly prospective Arabian-Nubian Shield. The Company operates in Ethiopia and Saudi Arabia with projects including Tulu Kapi project, Jibal Qutman EL and Hawiah.
